According to President Bush the world financial crisis was in no way caused by free market economic policy. History doesn’t support the president’s belief. Our current crisis is a repetition of many other periods of abuse of economic freedom, most memorably the Great Depression.

Capitalism is successful when economic and political freedom are mutually supportive. Institutional responsibility and political protection of the individual freedoms set forth in our Constitution are both necessary.

According to Forbes magazine publisher Steve Forbes, our current economic crisis is just another ripple on the waters of the wealthy: “Greed and recklessness always run rampant during bubbles, and the mania that has engulfed the housing and financial sectors was no exception.”

In other words, recessions are inevitable, and government oversight just screws up the parade.

As quoted in the AARP Bulletin, the sage of Omaha, Warren Buffett, says our current financial problems began with “geeks bearing formulas.”

Offspring of graduate schools of business conjured up schemes which put the world financial markets in a tangle and eventually destroyed confidence. The value of paper investments became suspect.

The players in our present tangle deserve more than just criticism. Bankers and brokers shuffled money like riverboat gamblers. Politicians insisted anyone with a pulse and a paycheck should qualify for a mortgage. Fannie Mae and Freddie Mac bought up bad loans so skillfully their executives earned huge bonuses. Flogging might be appropriate.

Because of its conviction that free markets are always self-regulating, the White House sent hot cocoa and cookies to regulatory agencies such as the Securities and Exchange Commission (SEC) with a suggestion they take a long nap. SEC should win the international snoring cup, if there is one.

In recent days of White House people running up to Capitol Hill with another rescue scheme, and members of Congress grandstanding for the nightly news, the smoke of doing good is so thick we loose sight of how complicated world financial markets have become. Complication was not by accident.

NAFTA, CAFTA, and other “AFTAs” being proposed to Congress and promoted around the world are networks of enmeshment. They are free markets on steroids. They are too big for any nation to understand or regulate, which is what international banking and business communities are counting on.

As a true believer, President Bush says free markets are efficient and self-regulating in their own best interests. They said so at Yale, in Economics 101. If that’s the case, how did we get where we are? Looks more like bigger is worser.

Most Americans assume rightly that some of their few fellow citizens are hiding assets offshore to avoid taxes and attachments. As one example, IRS admits knowing about off-shore stock-swap schemes since 1991.

Recently a U.S. Senate report accused Lehman Brothers, Morgan Stanley, Deutsche Bank, Merrill Lynch, and Citigroup of actually promoting schemes to avoid taxes. The geeks weren’t just thinking up devious formulas, they were selling them to tax dodgers. IRS says it is investigating. No yawning, please.

The SEC said it didn’t have the resources to keep up with the razzle-dazzle in the securities markets, but now that their staff levels are higher, they think Congress should enact a broader financial overhaul. Does that mean no more warm milk, cookies, and naps at the SEC?

In a recent appearance before Congress, former fed chairman Alan Greenspan played the part of Inspector Renault (Claude Raines) in the movie Casablanca: “I’m shocked, shocked to find out there’s gambling going on in here ….” Greenspan told Congress he was shocked that the free market didn’t act to protect itself and its stockholders. Shocked!

Before the current crisis, there was more gambling than investing going on in the free market, much of it by major banks and investment houses. It was a poker game in which everybody raised and nobody called.

Everybody likes to get in on a good thing, including international bankers. Can’t let those greedy Americans have all the fun. That’s how the present crisis became worldwide. Can’t say we weren’t willing to share.

Columnist Thomas Friedman (The World Is Flat) observed recently: “We’re all connected and nobody is in charge.” When it comes to regulation of the excesses of the free markets, the laws of single nations are considered a joke. There are too many players, too many games to follow, and too many hidden ball plays.

For those of us with collateral damage seats at the big game of international finance, best we can hope for is a new administration and a new Congress which understands that free markets ain’t free where we sit.

Jim Flynn was formerly a corporate counsel, served in military intelligence during the Korean War, and once aspired to be a newspaper columnist.